1100 W. Ewing Assoc, LLC v. United States

In the United States Court of Federal Claims
No. 16-314L
(Filed: June 27, 2018)
*************************************
*
1100 W. EWING ASSOC., LLC, *
*
ARGONAUT PROPERTIES, INC., *
* Rails to Trails Case; National Trails
Plaintiffs, * System Act, 16 U.S.C. § 1241
* (2006); Washington State Property
v. * Law; Deed Interpretation; Easement;
* Fee Simple.
THE UNITED STATES, *
*
Defendant. *
*
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Thomas S. Stewart, with whom were Elizabeth McCulley, Steven M. Wald, and Michael J.
Smith, Stewart Wald & McCulley, LLC, Kansas City and St. Louis, Missouri, for Plaintiffs.
Kristine S. Tardiff, with whom was Jeffrey H. Wood, Acting Assistant Attorney General,
Natural Resources Section, Environmental and Natural Resources Division, U.S.
Department of Justice, Washington, D.C., for Defendant.
OPINION AND ORDER
WHEELER, Judge.
The Plaintiffs in this “rails-to-trails” case seek just compensation for an alleged Fifth
Amendment taking of their reversionary property interests in segments of a dormant rail
corridor under the National Trails System Act. The Plaintiffs argue that their predecessors-
in-interest conveyed only an easement in the rail corridor to the railroad company and the
Government’s contemplated conversion of the rail corridor to recreational trails amounts
to a taking of their property. In response, the Government argues that the Plaintiffs have
no cognizable property interest in the rail corridor because their predecessors-in-interest
conveyed a fee simple to the railroad company. As explained below, the Court finds that
the Plaintiffs’ predecessors-in-interest conveyed the relevant segments of the rail corridor
to the railroad in fee simple. Since the Plaintiffs have no cognizable property interest in
the rail corridor, the Court GRANTS the Government’s cross-motion for summary
judgment and DENIES Plaintiffs’ motion for partial summary judgment.
Background
A. History of the Nation’s Railroads and the National Trails System Act
The Interstate Commerce Act of 1887 gives the Surface Transportation Board
(“STB”) exclusive and plenary authority over the construction, operation and abandonment
of the nation’s rail lines. Chicago & Nw. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S.
311, 312 (1981). A railroad company may not cease to provide service on a particular rail
line without first receiving express consent from the STB. Colorado v. United States, 271
U.S. 153, 165 (1926). Historically, a railroad company had two options if it wished to stop
providing rail line service. First, it could apply to the STB for permission to “cease
operating a line for an indefinite period while preserving the rail corridor for possible
reactivation of service in the future.” Preseault v. ICC, 494 U.S. 1, 5 n.3 (1990) (“Preseault
I”). Alternatively, a railroad company could seek permission to permanently terminate
service by initiating abandonment proceedings. If the STB approved the abandonment, the
rail line was removed from the national transportation system and the STB’s jurisdiction
over the underlying land ended. Id.; Hayfield N. R.R. Co., Inc. v. Nw. Transp. Co., 467
U.S. 622, 633 (1984). State law then governed the disposition of the underlying land.
Preseault I, 494 U.S. at 5–6.
Concerned about the loss of property interests in the nation’s rail corridors,
Congress enacted the National Trails System Act Amendments of 1983 to the National
Trails System Act of 1968. 16 U.S.C. § 1241 et seq. (2006) (“Trails Act”). Section 8(d)
of the Trails Act provided an alternative to initiating abandonment proceedings called
“railbanking”. Preseault I, 494 U.S. at 6. Railbanking allows a third party to temporarily
convert the rail line to a recreational trail and “assume full responsibility” for the
management of the right-of-way while preserving the right-of-way for future rail line use.
16 U.S.C. § 1247; Preseault I, 494 U.S. at 6–7. In order for a rail corridor to be railbanked,
a railroad must first initiate the STB’s abandonment process. 49 C.F.R. §§ 1152.29,
1152.50. Then, a party interested in acquiring the corridor for railbanking must request
that the STB issue a Certificate of Interim Trail Use (“CITU”) or a Notice of Interim Trail
Use (“NITU”). 49 C.F.R. § 1152.29(c)–(d). The purpose of the CITU or NITU is to
preserve the STB’s jurisdiction and prevent the application of state reversionary property
law. Caldwell v. United States, 391 F.3d 1226, 1229–30 (Fed. Cir. 2004). If the railroad
is willing to negotiate a railbanking agreement, the STB will issue the CITU or NITU.
Preseault I, 494 U.S. at 7 n.5. If negotiations are successful, the STB suspends
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abandonment proceedings and the interested third party establishes recreational trails on
the rail corridor. The Trail Act states that interim trail use “shall not be treated, for purposes
of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad
purposes.” 16 U.S.C. § 1247(d). If negotiations are unsuccessful, the railroad may
continue to pursue abandonment proceedings before the STB. 49 C.F.R. § 1152.29(d)(1).
The Trails Act’s railbanking provision has created a new category of Fifth
Amendment takings cases before this Court, referred to as “rails-to-trails” cases. See Pls.’
Mot. at 7 n.8 (listing cases in which plaintiffs seek relief for an uncompensated taking
under the Trails Act). The Preseault cases are the seminal cases establishing the existence
of a takings claim under the Trails Act. Preseault I, 494 U.S. 1; Preseault v. United States,
100 F.3d 1525 (Fed. Cir. 1996) (“Preseault II”). The Preseaults were Vermont property
owners with land adjacent to the Vermont Railway’s railroad easement. The Government
issued a CITU allowing the rail line to be converted to a trail, and the Preseaults challenged
the constitutionality of the CITU in federal court. Preseault I, 494 U.S. at 2–4. In Preseault
I, the Supreme Court unanimously held that railbanking under the Trails Act gave rise to
just compensation claims under the Fifth Amendment because the Trails Act prevented
property interests from reverting under state law. 494 U.S. at 13. The Preseaults then filed
a takings claim before this Court which was dismissed because the Preseaults “had no
reasonable expectation of obtaining a reversion by operation of state law.” Preseault v.
United States, 27 Fed. Cl. 69, 92 (1992). The Federal Circuit reversed and remanded,
holding that the operative question is whether the conversion of the right-of-way to a
recreational trail constituted a taking given the scope of the railroad’s initial easement, not
the expectations of the current landowners. Preseault II, 100 F.3d at 1542–44.
B. Relevant Facts of This Case
The rail corridor at issue in this case was originally acquired in the 1880s as part of
the development of the Seattle, Lake Shore and Eastern Railway Company. See Def.’s
Cross-Mot. at 5; Pls.’ Mot. at 10. In order to secure rights to the land needed to construct
rail lines, the Seattle, Lake Shore and Eastern Railway Company successfully sought deeds
from property owners adjacent to the rail corridor (called “source deeds”). Def.’s Cross-
Mot. at 5–6; Pls.’ Mot. at 10. Through various purchases and consolidations, BNSF
Railway Company (“BNSF”) eventually became the successor-in-interest to the Seattle,
Lake Shore and Eastern Railway Company. See Def.’s Cross-Mot. at 6; Pls.’ Mot. at 10.
This case involves six parcels of land adjacent to the rail corridor at issue, one parcel
abutting Plaintiff 1100 W. Ewing Assoc., LLC’s (“1100 W. Ewing”) property, and the
other five abutting Plaintiff Argonaut Properties, Inc.’s (“Argonaut”) property. Pls.’ Mot.
at 13. The parties have stipulated that two source deeds are applicable to Plaintiffs’ parcels
of land. The first source deed, dated June 25, 1885, is from Daniel H. Gilman to the Seattle,
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Lake Shore and Eastern Railway Company (“Gilman Deed”) and conveys interest in
property known as “NARA Parcel 6.” Id. NARA Parcel 6 currently adjoins 1100 W.
Ewing’s only parcel of land (Claim No. 1) and three of Argonaut’s parcels of land (Claim
Nos. 2.A, 2.B, and 2.C) at issue in this case. Id. The second source deed, dated March 5,
1887, is from Mary J. Ross to the Seattle, Lake Shore and Eastern Railway Company
(“Ross Deed”) and conveys interest in property known as NARA Parcel 8. See Def.’s
Cross-Mot. at 6; Pls.’ Mot. at 13. NARA Parcel 8 currently adjoins Argonaut’s remaining
two parcels of land (Claim Nos. 2.D and 2.E) at issue. Pls.’ Mot. at 13. Both parties agree
that the Gilman and Ross Deeds are dispositive of BNSF and Plaintiffs’ ownership interest
in the rail corridor abutting Plaintiffs’ property. See Def.’s Cross-Mot. at 11; Pls.’ Mot. at
15.
On July 10, 2015, BNSF filed a Notice of Exemption with the STB, initiating
proceedings to abandon 1,100 linear feet of the rail line along the rail corridor located in
Seattle, Kings County, Washington. Def.’s Cross-Mot., Ex. 8. On August 20, 2015, the
City of Seattle filed a request with the STB for the issuance of an NITU in order to negotiate
railbanking and the conversion of the rail corridor into a recreational trail under the Trails
Act. Id. at 7; Pls.’ Mot. at 11. BNSF did not object to the City’s request, and on September
17, 2015, the STB issued a NITU and imposed a public use condition. See Def.’s Cross-
Mot. at 7; Pls.’ Mot., Ex. D. The NITU provided a 180-day period for the City and BNSF
to negotiate an agreement for interim trail use and railbanking of the corridor, and the
public use condition allowed for BNSF to negotiate with other outside parties for the
acquisition of the corridor for public purposes. Def.’s Cross-Mot. at 7. If no such
agreement was reached before the 180 days expired, the NITU allowed BNSF to abandon
the corridor. Id. After the City of Seattle applied for several extensions, the STB extended
the negotiation period to September 1, 2018. Def.’s Rep. at 14. As of this date, BNSF has
neither reached an agreement with the City nor abandoned the rail corridor.
Procedural History
On March 10, 2016, Plaintiffs filed a complaint in this Court (which was later
amended twice), seeking just compensation for an alleged Fifth Amendment taking of their
reversionary property interests in segments of the rail corridor described above. After the
conclusion of discovery, the parties filed a joint status report on September 13, 2017,
requesting to file cross-motions for summary judgment on “the threshold questions of
whether the railroad acquired fee simple title or an easement to the pertinent segments of
the subject railroad corridor right-of-way . . . .” Dkt. No. 25. The Court granted the request
the following day. See Dkt. No. 26.
However, both parties’ cross-motions included briefing on additional issues beyond
this threshold title issue. As such, the Court issued an Order on May 11, 2018 limiting its
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current disposition to deciding whether the Gilman and Ross Deeds conveyed a fee simple
interest or easement to the railroad and, if necessary, deferring ruling on all other issues to
a later date and forum. See Dkt. No. 47. In so doing, the Court also granted two of the
Government’s motions to strike Plaintiffs’ expert affidavits (Dkt. Nos. 37, 44), as the
affidavits related to non-threshold title issues. See Dkt. No. 47. The parties completed
briefing the threshold title issue on April 6, 2018, and the Court held oral argument on June
19, 2018.
Discussion
Summary judgment should be granted when “there is no genuine issue as to any
material fact” and “the movant is entitled to judgment as a matter of law.” RCFC 56(a).
A fact is “material” if it might significantly alter the outcome of the case under the
governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving
party bears the initial burden of showing that there exists no genuine dispute as to any
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment will
not be granted if the “evidence is such that a reasonable [trier of fact] could return a verdict
for the nonmoving party.” Anderson, 477 U.S. at 248. However, when “the record taken
as a whole could not lead a rational trier of fact to find for the nonmoving party, there is
no ‘genuine issue for trial.’” Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
The Fifth Amendment of the U.S. Constitution states that “private property [shall
not] be taken for public use, without just compensation.” U.S. Const. amend. V. In order
to successfully allege a Fifth Amendment taking upon the issuance of a NITU, plaintiffs
must prove that “state law reversionary interests are effectively eliminated in connection
with a conversion of a railroad right-of-way to trail use.” Caldwell, 391 F.3d at 1228 (citing
Preseault II, 100 F.3d at 1543). Following Preseault II, the Federal Circuit developed a
three-part liability test for whether a plaintiff is entitled to compensation in a rails-to-trails
case. First, plaintiffs must show that they have an ownership interest in the segments of
the rail corridor where the railroad company possesses an easement. Ellamae Phillips Co.
v. United States, 564 F.3d 1367, 1373 (Fed. Cir. 2009). If the railroad company owns the
pertinent portion of the rail corridor in fee simple, then the Government has no takings
liability. Preseault II, 100 F.3d at 1533. Second, if the railroad only possesses an easement,
Plaintiffs must show that trail use falls outside the scope of the easement. Ellamae Phillips
Co., 564 F.3d at 1373. Finally, even if trail use is within the scope of the easement,
plaintiffs may still prevail if the rail corridor was abandoned before the STB issued the
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CITU or NITU. Id. As the Court explained above, only the first part of the test is currently
at issue before the Court. See Dkt. No. 47.
Given the parties’ agreement that the Gilman Deed and the Ross Deed are
dispositive of the property interests relevant in this case, determining the property interests
of the parties is purely a matter of deed interpretation. See Def.’s Cross-Mot. at 11; Pls.’
Mot. at 15. Therefore, summary judgment is appropriate in this case. RCFC 56(a).
Analysis of Gilman and Ross Deeds
In order to address the first part of the Ellamae Phillips Co. liability test, the Court
must decide whether the Gilman Deed and the Ross Deed conveyed BNSF’s predecessor-
in-interest fee simple interests or easements. If BNSF owns the relevant segments of the
rail corridors in fee simple, then the Government cannot have committed a Fifth
Amendment taking of the Plaintiffs’ property by issuing the NITU and the Court need go
no further. Ellamae Phillips Co., 564 F.3d at 1373; Preseault II, 100 F.3d at 1533.
Washington State property law governs the interpretation of the two deeds in this
case. Preseault I, 494 U.S. at 8, 16; Rogers v. United States, 814 F.3d 1299, 1305 (Fed.
Cir. 2015) (“We analyze the property rights of the parties in a rails-to-trails case under the
relevant state law.”). Under Washington law, the interpretation of a deed is a mixed
question of law and fact. See Veach v. Culp, 599 P.2d 526, 527 (Wash. 1979); Lawson v.
State of Washington, 730 P.2d 1308, 1311–12 (Wash. 1986). Throughout the twentieth
century, the Washington Supreme Court struggled to articulate a clear and consistent
method for construing deeds like the ones at issue in this case. See, e.g., Brown v. State,
924 P.2d 908, 911 (Wash. 1996) (“Many courts have considered whether a railroad deed
conveys fee simple or an easement. . . . The decisions are in considerable disarray and
usually turn on a case-by-case examination of each deed.” (citation omitted)); Kershaw
Sunnyside Ranches, Inc. v. Yakima Interurban Lines Ass’n, 126 P.3d 16, 21 (Wash. 2006)
(“Throughout the 20th century, railroad deeds posed a recurring problem for courts,
promoting our court to opine that ‘[t]he authorities are in hopeless conflict’ and, in large
part, ‘cannot be reconciled.’” (quoting Swan v. O’Leary, 225 P.2d 199, 200 (Wash.
1950))); see also Beres v. United States, 97 Fed. Cl. 757, 767 (2011); Haggart v. United
States, 108 Fed. Cl. 70, 86 (2012). Despite its difficulties, the Washington Supreme Court
has consistently held that when construing deeds, its “principle aim is to effect and enforce
the intent of the parties.” Kershaw Sunnyside Ranches, 126 P.3d at 21 (citing Brown, 924
P.2d at 911–12).
In order to ascertain whether the parties intended to convey a fee simple interest or
an easement, the Washington Supreme Court in 1950 attempted to lay down a bright-line
rule in Swan:
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We think when [Morsbach v. Thurston County, 278 P. 686
(Wash. 1929)] is critically read and considered with the precise
question we have before us, it is clear that we adopted the rule
that when the granting clause of a deed declares the purpose of
the grant to be a right of way for a railroad the deed passes an
easement only, and not a fee with a restricted use, even though
the deed is in the usual form to convey a fee title.
Swan, 225 P.2d at 201. Applying this rule, the Swan court found that a quitclaim deed
conveying “for the purpose of a Railroad right-of-way . . . a strip of land 50 feet in width”
in the granting clause conveyed an easement and not a fee simple. Id. at 199. After Swan,
the Washington Supreme Court gave special consideration to the term “right of way” in
deeds, holding that the presence of such language in the granting clause strongly favored
the conveyance of an easement. See Veach, 599 P.2d at 527 (finding an easement where
the granting clause conveyed “[a] right-of-way one hundred feet wide . . . excepting all
rights for road purposes that may have been conveyed to [the County] and reserving all
littoral and riparian rights to [the grantors]”); Roeder Co. v. Burlington Northern, Inc., 716
P.2d 855, 859–60 (Wash. 1986) (finding an easement where the granting clause conveyed
“for all railroad and other right of way purposes, certain tracts and parcels of land situate
in the City of Bellingham . . . ”); Kershaw Sunnyside Ranches, 126 P.3d at 17, 25 (finding
an easement where the granting clause conveyed “a strip of land seventy five feet
wide . . . to be used by [the Railway] as a right of way for a railway forever, together with
the perpetual right to construct, maintain and operate a railway or railways over and across
the same”).1
The Washington Supreme Court further developed its railroad deed interpretation
jurisprudence in 1996 in Brown, 924 P.2d 908. In Brown, the court reiterated that “the
intent of the parties is of paramount importance” when construing railroad deeds and that
the phrase “right of way” is given “special significance.” Id. at 912. However, the court
1
The Washington Supreme Court appears to have followed this same trend before it decided Swan,
although Swan was the first case to clearly articulate the principal that the presence of the term “right-of-
way” in a granting clause favored the conveyance of an easement. See Biles v. Tacoma, O. & G. H. R. Co.,
32 P. 211, 212 (Wash. 1893) (finding an easement where the granting clause conveyed “a strip of land
extending through the same . . . to be used for a right of way or other railroad purposes . . .”); Reichenbach
v. Washington Short-Line Ry. Co., 38 P. 1126, 1126 (Wash. 1894) (finding an easement where the granting
clause conveyed “a right of way for said railroad”); Morsbach, 278 P. at 687 (finding an easement where
the granting clause conveyed “[a] right of way for the construction of said company’s railroad . . .”).
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also found that where a deed adopted a certain statutory form under Washington law2 and
the granting clause conveyed “a definite strip[] of land,” the court must find that the
grantors intended to convey a fee simple interest “unless additional language in the deed[]
clearly and expressly limits or qualifies the interest conveyed.” Id. (footnote omitted); see
also id. at 915. The court then set out seven factors to determine whether the language in
the remainder of the deed limited the conveyance of land to an easement:
(1) whether the deed conveyed a strip of land, and did not
contain additional language relating to the use or purpose to
which the land was to be put, or in other ways limiting the
estate conveyed; (2) whether the deed conveyed a strip of land
and limited its use to a specific purpose; (3) whether the deed
conveyed a right of way over a tract of land, rather than a strip
thereof; (4) whether the deed granted only the privilege of
constructing, operating, or maintaining a railroad over the land;
(5) whether the deed contained a clause providing that if the
railroad ceased to operate, the land conveyed would revert to
the grantor; (6) whether the consideration expressed was
substantial or nominal; and (7) whether the conveyance did or
did not contain a habendum clause, and many other
considerations suggested by the language of the particular
deed.
Id. at 912. The court further noted that in addition to the language of the deed itself, it
would also “look at the circumstances surrounding the deed’s execution and the subsequent
conduct of the parties.” Id. (citations omitted). Using this new test, the Brown court found
that the deed at issue conveyed a fee simple based on the fact that the deed adopted the
“statutory warranty form” and conveyed definite strips of land without any further
limitations or qualifications, unlike the deeds in earlier cases that contained limiting
language (e.g., “right of way”) in the granting or habendum clauses. Id. at 914–15. Lastly,
the court explained that while a deed can have a “manifest purpose” to convey land for rail
lines, this purpose does not prohibit a railroad from holding rights of way in fee simple.
Id. at 915.
The Washington Supreme Court most recently clarified its test for determining
whether a railroad deed conveys a fee simple interest or an easement in Kershaw Sunnyside
Ranches, 126 P.3d 16. In Kershaw Sunnyside Ranches, the court held that the presence of
2
Under Washington law, if a deed is “substantially in” the statutory form for a warranty deed or a bargain
and sale deed, the deed operates to convey a fee simple estate. See WAS. REV. CODE §§ 64.04.030, .040
(formally Excerpt of Laws of Washington Territory, 1886 pp. 177–78, §§ 3, 4).
8
limiting phrases like “right of way” and “railroad purposes” in the granting clause of a
deed—even if the deed is in a certain statutory form—creates the presumption of an
easement.3 Id. at 24–25; see also Haggart, 108 Fed. Cl. at 87. This presumption can then
be rebutted by using the Brown factors to analyze the remainder of the deed for any
language cutting against the intention to convey an easement. Kershaw Sunnyside
Ranches, 126 P.3d at 24–25. Moreover, the court noted that “[w]hile the use of the term
‘right of way’ in the granting clause is not solely determinative of the estate conveyed, it
remains highly relevant, especially given the fact that it is used to define the purpose of the
grant.” Id. at 25 (emphasis in original). Having analyzed the deed at issue accordingly,
the Kershaw court found that the deed conveyed an easement to the railroad because the
granting clause conveyed “a strip of land . . . to be used by [the Railway] as a right of way
for a railway forever, together with the perpetual right to construct, maintain and operate a
railway or railways over and across the same,” and the remainder of the deed did not
provide enough evidence to overcome the presumption of an easement created by this
limiting language. Id. at 18, 24–25.
This Court has twice had the occasion of interpreting railroad deeds under
Washington State law to determine whether fee simple interests or easements were
conveyed: first, in Beres, 97 Fed. Cl. 757; and second, in Haggart, 108 Fed. Cl. 70. In
both cases, pursuant to Kershaw Sunnyside Ranches, the Court first analyzed the granting
clauses of the deeds at issue to identify any limiting language creating the presumption of
an easement. See Beres, 97 Fed. Cl. at 805–06; Haggart, 108 Fed. Cl. at 87. Having
concluded in each case that such language was present, the Court then employed the seven
Brown factors to analyze the remainder of the deeds to determine whether the presumption
of an easement had been rebutted. See Beres, 97 Fed. Cl. at 806–09; Haggart, 108 Fed. Cl.
at 88–94. In each case, the Court weighed the Brown factors and concluded that the
remainder of the deeds did not provide enough evidence to rebut the presumption that the
grantors intended to convey easements to the railroad. See Beres, 97 Fed. Cl. at 809;
Haggart, 108 Fed. Cl. at 88–94, 98.
Following the methods employed by this Court in Beres and Haggart pursuant to
the Washington Supreme Court’s holdings in Brown and Kershaw Sunnyside Ranches, the
Court now endeavors to interpret the two source deeds at issue in this case to determine
whether they conveyed fee simple interests or easements to the railroad.
3
Kershaw Sunnyside Ranches did not overturn Brown. See Kershaw Sunnyside Ranches, 126 P.3d at 24–
25. Thus, Brown’s holding that the use of a statutory warranty or bargain and sale deed creates the
rebuttable presumption of a fee simple conveyance is still valid law. See Beres, 97 Fed. Cl. at 782.
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A. 1100 W. Ewing and Argonaut Do Not Have a Cognizable Property Interest in
the Relevant Portions of the Rail Corridor Adjacent to Their Property Because
the Gilman Deed Conveyed the Rail Corridor in Fee Simple.
The pertinent language in the Gilman Deed is as follows:
Witnesseth that the said party of the first part for and in
consideration of the sum of Five Hundred and Twenty Five
Thousands of Dollars to him in hand paid by the said party of
the second part, the receipt whereof is hereby acknowledged
and of the performance by the party of the second part of the
conditions named in the agreements hereinafter mentioned,
does by these presents grant, bargain, sell and convey unto the
said party of the second part and to its successors and assigns
forever.
All that certain tract of land and the tide flats in front
thereof and the riparian rights attached thereto bounded and
described as follows to wit: A strip of land one hundred feet
in width bounded in front by the United States Government
meander line of Elliott Bay in from of Lots one (1) and two (2)
Section Twenty three (23) and Lot one (1) of Section Twenty
Four (24) Township Twenty Five (25) North Range three (3)
east. Willamette Meridian, King County, Washington
Territory.
The right of way for a railroad mentioned in the
Agreement hereinafter referred to, is also hereby granted and
conveyed to said party of the second part.
The title of the party of the first part to said property and
rights is derived from an agreement made and entered between
Harry A. Smith and the party of the first part on the 23rd day
of March, 1885 . . . . It is hereby expressly stipulated that the
party of the second part must comply with all the Conditions
by which the part of the first part is bound in said agreement.
...
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To have and to hold all singular the said premises,
together with appurtenances, unto the said party of the second
part and its successors and assigns forever.
Pls.’ Mot. at 15–16, Ex. F; Def.’s Cross-Mot. at 17, Ex. 4. Pursuant to Kershaw Sunnyside
Ranches, the Court will first examine the granting clause of the deed and then turn to the
Brown factors to determine if the remainder of the deed rebuts any presumptions created
by the granting clause.
1. The Gilman Deed’s Granting Clauses Support the Rebuttable Presumption
that the Deed Conveyed a Fee Simple Interest.
The Court first notes that the Gilman Deed is “substantially in” the statutory form
for a bargain and sale deed under Washington law because it purports to “bargain[], sell[],
and convey[]” a strip of land “for and in consideration” of a certain sum of money “in hand
paid.” Was. Rev. Code § 64.04.040 (formerly Excerpt of Laws of Washington Territory,
1886 p. 178 § 4); see also Def.’s Cross-Mot. at 17 n.7. Absent any express limiting
language in the remainder of the deed, particularly in the granting clause, deeds adopting
this statutory form convey fee simple interests under Washington law. See Was. Rev. Code
§ 64.04.040; see also Brown, 924 P.2d at 912. Thus, pursuant to Kershaw Sunnyside
Ranches, the Court must next determine whether there is any limiting language in the
granting clause creating the rebuttable presumption that the Gilman Deed conveyed an
easement despite the fact that the deed is in the bargain and sale statutory form. 126 P.3d
at 24–25.
There are two granting clauses in the Gilman Deed. The first granting clause
conveys “[a] strip of land One Hundred feet in width bounded in front by the United States
Government meander line of Elliott Bay in from of Lots one (1) and two (2) Section Twenty
three (23) and Lot one (1) of Section Twenty Four (24) Township Twenty Five (25) North
Range three (3) east. Willamette Meridian, King County, Washington Territory.” Pls.’
Mot. at 15–16, Ex. F; Def.’s Cross-Mot. at 17, Ex. 4. The second granting clause states,
“[t]he right of way for a railroad mentioned in the Agreement hereinafter referred to, is
also hereby granted and conveyed . . . .” 4 Pls.’ Mot. at 15–16, Ex. F; Def.’s Cross-Mot. at
17, Ex. 4. It is not entirely clear to the Court which granting clause actually conveyed
Plaintiffs’ relevant parcels of property at issue in this case under the Gilman Deed (Claim
Nos. 1, 2.A, 2.B, and 2.C). However, the Court need not resolve this issue because it
4
The “Agreement” referred to in this granting clause is an agreement between Henry A. Smith and Daniel
H. Gilman dated March 28, 1885 (“Smith Agreement”), in which Mr. Smith conveyed certain parcels of
land and other property rights to Mr. Gilman prior to Mr. Gilman’s granting of land to the railroad. See
Pls.’ Rep., Ex. A; Def.’s Cross-Mot. at 18, Ex. 6.
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reaches the same conclusion after analyzing both clauses: both granting clauses favor the
conveyance of a fee simple interest.
The first granting clause does not contain any limiting language that would support
the intent to convey only an easement to the railroad. In fact, the clause conveys a definite
“strip of land” with no conditions or limitations attached whatsoever. Def.’s Cross-Mot.
at 17, Ex. 4. The clause is devoid of any limiting phrases like “right of way” or “for railroad
purposes” and thus, coupled with the fact that the deed is a bargain and sale deed, the first
granting clause unambiguously creates the presumption that the grantor intended to convey
the “strip of land” to the railroad in fee simple. See Brown, 924 P.2d at 912.
The second granting clause likewise supports the conveyance of a fee simple
interest. Plaintiffs argue that because the granting clause conveys “[t]he right of way for a
railroad,” the deed automatically conveys an easement to the railroad under Washington
law. See Pls.’ Mot. at 32 (“[T]he grant of ‘the rights of way for a railroad’ are all that is
needed for a determination tha[t] an easement was conveyed.”). Such is not the case. In
making their argument, Plaintiffs overgeneralize Washington law. Indeed, the Washington
Supreme Court stated the exact opposite in Kershaw Sunnyside Ranches when it held that
“the use of the term ‘right of way’ in the granting clause is not solely determinative of the
estate conveyed . . .” and that the Court must also weigh the other language in the deed.
126 P.3d at 25 (emphasis in original). Moreover, the Washington Supreme Court explicitly
held in Brown, en banc, that the term “right of way” in a deed “can have two purposes:
(1) to qualify or limit the interest granted in a deed to the right to pass over a tract of land
(easement), or (2) to describe the strip of land being conveyed to a railroad for the purpose
of constructing a railway.” 924 P.2d at 914 (citing Morsbach, 278 P. 686; Harris v. Ski
Park Farms, Inc., 844 P.2d 1006 (Wash. 1993)); see also Roeder Co. v. K & E Moving &
Storage Co., 4 P.3d 839, 841–42 (Wash. Ct. App. 2000). The Court is persuaded that the
term “right of way” in the second granting clause merely describes the land being conveyed
to the railroad by way of the Smith Agreement and does not impose a limitation on the
actual conveyance. This conclusion is supported by both the substance of the Smith
Agreement and the plain language of the second granting clause.
The Smith Agreement grants to Mr. Gilman (1) a 100 feet wide strip of land; (2) a
200 feet wide right of way; and (3) a 50 feet wide right of way, along with riparian rights
and conditions to construct a wharf.5 See Pls.’ Rep., Ex. A; Def.’s Cross-Mot., Ex. 6. It is
again unclear which of these grants purportedly applies to the land at issue in Plaintiffs’
claim numbers 1, 2.A, 2.B, and 2.C, and the parties admit that the “50 feet wide right of
5
Under Washington law, a court may look to extrinsic evidence along with the language of the deed itself
to ascertain the intent of the parties, even in the absence of any ambiguity in the deed. See Brown, 924
P.2d at 912; see also Roeder Co., 4 P.3d at 841 n.6.
12
way” was actually 100 feet wide when it was subsequently built, creating further ambiguity
and uncertainty. Thus, the Court evaluates the Smith Agreement as a whole to conclude
that Mr. Smith conveyed all his land to Mr. Gilman in fee simple, and that Mr. Gilman in
turn conveyed said land to the railroad in fee simple. This conclusion is bolstered by the
fact that the Smith Agreement explicitly states that Mr. Smith is the owner of the granted
land “in fee simple,” and the combination of multiple grants of land along with riparian
rights and conditions to build a wharf favor the conveyance of “all the potential sticks in
the bundle”—thus, a fee simple interest. See Kershaw Sunnyside Ranches, 126 P.3d at 24.
Relatedly, the second granting clause is not a traditional granting clause and is
merely a shortcut to direct the parties to the grants of land described in the Smith
Agreement. If Mr. Gilman desired to convey an easement to the railroad, he could have
used much stronger limiting language in this granting clause such as “for all railroad and
other right of way purposes”, “to be used by [the Railway] as a right of way for a railway
forever, together with the perpetual right to construct, maintain and operate a railway or
railways over and across the same”,6 “the intention being to convey herein a right of way”,
or other similar language found in other deeds that created the presumption of an easement
conveyance under Washington law. See, e.g., Roeder Co., 716 P.2d 855; Kershaw
Sunnyside Ranches, 126 P.3d 16; Biles, 32 P. 211; Beres, 97 Fed. Cl. 757. Absent this
express limiting language in either the first or second granting clauses, together with the
fact the Gilman Deed is “substantially in” the form of a bargain and sale deed, the Court
finds that each granting clause in the Gilman Deed presumes the conveyance of a fee simple
interest.
2. Other Language in the Gilman Deed Does Not Limit the Conveyance to an
Easement.
Having determined that the granting clauses in the Gilman Deed create the
presumption of a fee simple conveyance to the railroad, the Court now analyzes the
remainder of the Gilman Deed under the Brown factors to determine whether any
additional language rebuts this presumption and instead expresses the parties’ intent to
convey only an easement.
The first four Brown factors are examined together and look to the granting clause
for any limiting language that suggests the intent to convey only an easement. See Haggart,
108 Fed. Cl. at 88; Brown, 924 P.2d at 912. For the reasons explained above, the Court
6
The Washington Supreme Court in Kershaw Sunnyside Ranches held this specific limiting language in
the granting clause to be particularly indicative of the intent to convey an easement. 126 P.3d at 25. This
language is not present in either of the Gilman Deed’s granting clauses, or, for that matter, anywhere else
in the Gilman Deed.
13
finds that the language in the granting clauses favor the conveyance of a fee simple interest
to the railroad. The Court also notes that there is no language in either clause that grants
“only the privilege of constructing, operating, or maintaining a railroad over the land”,
further evidencing the intent to convey a fee simple interest. See Brown, 924 P.2d at 912.
The fifth Brown factor asks whether the deed contains a reverter clause “providing
that if the railroad ceased to operate, the land conveyed would revert to the grantor.” Id.
No such clause exists anywhere in the Gilman Deed, thus favoring the conveyance of a fee
simple interest.7
The sixth Brown factor asks “whether the consideration expressed was substantial
or nominal.” Id. The total stated consideration for the Gilman Deed is $525,000, which
was a substantial sum of money in the State of Washington in 1885. See Def.’s Cross-Mot.
at 18; Pls.’ Mot., Ex. F. While the stated consideration alone is not dispositive of the
property interest conveyed, this factor certainly weighs in favor of a fee simple conveyance.
The seventh Brown factor asks whether the deed “did or did not contain a habendum
clause” and asks the court to examine “many other considerations suggested by the
language of the particular deed.” 924 P.2d at 912. The Gilman Deed does contain a
habendum clause, which states the following: “[t]o have and to hold all singular the said
premises, together with appurtenances, unto the said party of the second part and its
successors and assigns forever.” Pls.’ Mot., Ex. F; Def.’s Cross-Mot., Ex. 4. Like the
granting clauses, the Gilman Deed’s habendum clause and legal description do not contain
any limiting language rebutting the presumption of a fee simple conveyance. The deeds
Plaintiffs rely on here that the Washington Supreme Court found to convey easements are
readily distinguishable from the Gilman Deed. For example, the deed at issue in
Reichenbach contained a habendum clause with similar language to the Gilman habendum
clause, but notably added the following limiting language: “so long as the same shall be
used for the operation of a railroad.” 38 P. at 1126. Similarly, the habendum clause in the
deed at issue in Pac. Iron Works v. Bryant Lumber Co. added to the end of the clause, “for
railway purposes, but if it should cease to be used for a railway the said premises shall
revert to said grantors, their heirs, executors, administrators or assigns.”8 111 P. 578, 579
(Wash. 1910). Further, the Lunn Deed in Haggart was captioned, “Right of Way Deed”
7
The Court in Haggart held that the absence of any such reverter clause rendered this factor inapplicable.
108 Fed. Cl. at 88. This Court disagrees. Instead, the absence of such a reverter clause supports the
conveyance of a fee simple interest, otherwise, this factor would be one-sided and meaningless.
8
It is worth noting that the granting clauses of both deeds in Reichenbach and Pac. Iron Works also
contained additional limiting language that, when combined with the limitations in the habendum clauses—
limitations, the Court notes, that are not present in the Gilman Deed’s habendum clause—supported the
conveyance of an easement. See Reichenbach, 38 P. at 1126; Pac. Iron Works, 111 P. at 579.
14
and contained the following limiting language in its legal description: “neither they nor
any person . . . shall have any claim or demand either in law or equity against said Railway
Company because of the construction[,] operation or maintenance of its said Railway
through said lands.” 108 Fed. Cl. at 92–93; see also Pls.’ Mot. at 30–32. Again, there is
no such limiting language in the Gilman Deed’s habendum clause, legal description, or
anywhere else in the deed. As such, the Court finds that there is not enough evidence in
the remainder of the Gilman Deed to rebut the presumption that the grantor intended to
convey a fee simple interest to the railroad.
The Court is also persuaded by the Government’s argument that the subsequent
actions of the parties support the conveyance of a fee simple interest to the railroad. First,
the fact that the portions of the railroad corridor adjoining Plaintiffs’ land at issue in this
case were specifically excepted (and thus excluded) from the subsequent platting of land
for “Gilman’s Addition to the City of Seattle” indicate that these portions of land were not
subject to a right of way easement and were instead granted in fee simple. See Def.’s
Cross-Mot. at 19–20; see also Lucier v. United States, No. 16-865L, 2018 WL 2471404, at
*37 (Fed. Cl. June 1, 2018). Additionally, that Argonaut received three out of five parcels
of its land directly from the railroad (for purposes of the Gilman Deed, only Claim Nos.
2.B and 2.C) strongly suggests that the railroad owned these parcels in fee simple and thus,
were conveyed such parcels in fee simple by the Gilman Deed. See Def.’s Rep. at 12–13.
Finally, the Court acknowledges—and the Government concedes—that the
manifest purpose of the Gilman Deed was to convey land to the Seattle, Lake Shore and
Eastern Railway Company to be used for a railroad. See id. at 9; see also Def.’s Cross-
Mot. at 21–22. However, as the Washington Supreme Court held in Brown, “[w]hile the
manifest purpose of the deeds [may be] to convey land for railroad lines, railroads have
never been prohibited from holding rights of way in fee simple.” 924 P.2d at 915 (citing
Morsbach, 278 P. 686). For the reasons explained above, the Court finds that while the
parties may have been motivated to convey land to the railway for the purposes of building
rail lines, the plain language of the Gilman Deed does not express an intent to limit the
conveyance to an easement. Rather, the language in the deed and the surrounding
circumstances indicate that the grantor intended to convey a fee simple interest to the
railroad.
B. Argonaut Does Not Have a Cognizable Property Interest in the Remaining
Portions of the Rail Corridor Adjacent to its Property Because the Ross Deed
Conveyed the Rail Corridor in Fee Simple.
The pertinent language in the Ross Deed is as follows:
15
Witnesseth said party of the first part and in consideration of
the sum of One Dollar, lawful money of the United States of
America, to her in hand paid by the said party of the second
part the receipt whereof is hereby acknowledged does by these
presents grant, bargain, sell and convey unto the said party of
the second part, and its successors and assigns, forever, a tract
of land extending Fifty (50) feet on both sides of the center line
of the Seattle, Lake Shore and Eastern Railway, as the said line
is now located on and over the John Ross Donation Claim.
...
To have and to hold, all and singular the said premises,
together with the appurtenance unto the said party of the
second part, and to its successors and assigns forever, for the
use and purpose of the part of the second part, for track and
roadway for said railway and the proper appurtenance to such
track and roadway.
Pls.’ Mot. at 16–17, Ex. G; Def.’s Cross-Mot. at 22–23, Ex. 5. As explained above, the
Court will first examine the granting clause of the deed and then turn to the Brown factors
to analyze the remainder of the deed.
1. The Ross Deed’s Granting Clause Supports the Rebuttable Presumption
that the Deed Conveyed a Fee Simple Interest.
Like the Gilman Deed, the Ross Deed is also “substantially in” the statutory form
for a bargain and sale deed under Washington law because it purports to “bargain[], sell[],
and convey[]” a tract of land “for and in consideration” of a certain sum of money “in hand
paid.” Was. Rev. Code § 64.04.040 (formerly Excerpt of Laws of Washington Territory,
1886 p. 178 § 4). Based on the Washington case law discussed in detail above, the Ross
Deed conveyed a fee simple interest to the railroad because there is no limiting language
whatsoever in the granting clause, and there is insufficient evidence in the remainder of the
deed to overcome the presumption of a fee simple conveyance.
The granting clause of the Ross Deed coveys “a tract of land extending Fifty (50)
feet on both sides of the center line of the Seattle, Lake Shore and Eastern Railway, as the
said line is now located on and over the John Ross Donation Claim.” Pls.’ Mot., Ex. G;
Def.’s Cross-Mot., Ex. 5. Like the first granting clause in the Gilman Deed, the Ross
Deed’s granting clause conveys a definite “tract of land” with no conditions or limitations
attached. Moreover, there is no mention of the term “right of way” or any other limiting
16
language that has been held to favor the conveyance of an easement anywhere in the
granting clause. Plaintiffs’ argument that the phrase “on and over” is indicative of an intent
to convey an easement is unpersuasive. In fact, the Washington Supreme Court in Brown
explicitly held that “[w]hile . . . ‘over and across’ [or similar] language may be consistent
with the grant of an easement, it is equally possible the parties used ‘over and across’
simply to locate the right of way.” 924 P.2d at 914. Without any further limiting language
in the granting clause, the Court finds that the phrase “on and over” was likely used merely
to locate the tract of land being conveyed. Thus, since the Ross Deed is a bargain and sale
deed with no limiting language in its granting clause, the Court finds that the Ross Deed’s
granting clause presumes the conveyance of a fee simple interest.
2. Other Language in the Ross Deed Does Not Limit the Conveyance to an
Easement.
The Court also finds that there is insufficient evidence in the remainder of the Ross
Deed to overcome the presumption of a fee simple conveyance. For the reasons explained
above, the Court holds that the first four Brown factors support a fee simple conveyance
because there is no limiting language in the granting clause. The fifth Brown factor also
favors a fee simple conveyance, as there is no reverter clause in the deed providing a
reversion back to the grantor “if the railroad ceases to operate.” Id. at 912.
The sixth Brown factor tends to favor the conveyance of an easement, since the
stated consideration is only $1. However, as the Court notes above, the stated consideration
alone is not dispositive of the property interest conveyed and many times is not an accurate
representation of the actual consideration paid.9 See Hanson Indus., Inc. v. Cnty. of
Spokane, 58 P.3d 910, 917 (Wash. Ct. App. 2002) (“[T]he consideration actually paid may
or may not be the amount stated in the deed. By itself, therefore, consideration is unreliable
as a guide.” (citing Brown, 924 P.2d 908)).
Plaintiffs argue that the seventh Brown factor favors the conveyance of an easement
because the Ross Deed’s habendum clause contains limiting language. Pls.’ Mot. at 33.
The habendum clause states, “[t]o have and to hold, all and singular the said premises,
together with the appurtenance unto the said party of the second part, and to its successors
and assigns forever, for the use and purpose of the part of the second part, for track and
roadway for said railway and the proper appurtenance to such track and roadway.” Def.’s
Cross-Mot., Ex. 5; Pls.’ Mot., Ex. G. Plaintiffs contend that the purpose language related
to “track and roadway for said railway and the proper appendages to such track and
roadway” clearly expresses an intent to convey only an easement. See Pls.’ Mot. at 33.
9
The Government notes that the record suggests the actual consideration paid for the Ross Deed was $400,
not $1. See Def.’s Cross-Mot. at 25.
17
The Court disagrees. At best, this language is a vague articulation of the parties’ general
motivation for conveying the land to the railroad, not a limitation on that conveyance. See
Brown, 924 P.2d at 915; Morsbach, 278 P. 686. This conclusion is reinforced by the fact
that there is no other limiting language anywhere in the deed; the term “right of way”
appears nowhere in the deed, and the deed is completely devoid of any of the other limiting
language that the Court has discussed in detail above evidencing an intent to convey only
an easement. What is more, the deed not only conveys a definite “tract of land” to the
railroad, but also “the reversion and reversions, remainder and remainders” that go along
with the land, indicating an intent to convey “all the potential sticks in the bundle” and
thus, a fee simple interest.10 See Kershaw Sunnyside Ranches, 126 P.3d at 24; Def.’s
Cross-Mot. at 25, Ex. 5.
For all these reasons, the Court finds that the Ross Deed conveyed a fee simple
interest to the railroad.
Conclusion
For the reasons stated above, the Court finds that neither 1100 W. Ewing nor
Argonaut have a property interest in the relevant segments of the rail corridor in dispute.
Since the Plaintiffs failed to satisfy the first step of the three-part liability test laid out in
Ellamae Phillips Co., the Government cannot be found liable for a Fifth Amendment taking
under the Trails Act. Thus, the Court GRANTS the Government’s cross-motion for
summary judgment and DENIES the Plaintiffs’ motion for partial summary judgment. All
other pending motions are denied as moot. The clerk is directed to enter judgment
accordingly. No costs.
IT IS SO ORDERED.
s/ Thomas C. Wheeler
THOMAS C. WHEELER
Judge
10
Plaintiffs are incorrect in reading this language to confer reversionary rights to Ms. Ross. See Pls.’ Mot.
at 33. Rather, the plain language of the deed indicates that the reversionary rights were granted to the
railroad together with the tract of land.
18